Globus Medical
(NYSE: GMED)
and Nuvasive today announced the completion of their previously announced merger.
The news sent GMED shares down more than 1% to $53.30 apiece by midday today, while MassDevice‘s MedTech 100 Index was up slightly.
Truist analysts cited investor fears over the deal causing near-term business disruptions. Globus Medical officials plan to discuss the closing of the merger and its potential benefits during the company’s third-quarter earnings call in November.
Richard Newitter, Samuel Brodovsky and Lin Zhang at Truist said: “Spine mergers historically have tended to be messy and often involve more disruption than parties originally anticipated. It’s possible ‘this time will be different’ — GMED is an exceptional company with a strong history of stellar execution — but we are not ready to make that call.”
The combined company is the world’s second-largest spine tech company after Medtronic, providing surgeons and patients with a comprehensive offering of musculoskeletal procedural solutions and enabling technologies.
“We’re thrilled to begin our journey together to create a leading global musculoskeletal company,” Globus Medical CEO and President Dan Scavilla said in a news release. “With a relentless focus on changing patient lives, we’re combining our differentiated portfolios and talented teams to reach more customers as we advance spine and orthopedic care globally.”
The two companies announced the agreement to combine the companies in an all-stock transaction in February. At the time, the deal valued NuVasive at $3.1 billion, with Globus shareholders owning roughly three-fourths of the newly merged company.
Both Globus Medical and NuVasive officials said earlier this month that they planned to stick with plans to close the merger during the present quarter, despite additional scrutiny from the Federal Trade Commission.
More about the closing
Under the terms of the agreement — which both companies’ boards unanimously approved — NuVasive shareholders receive 0.75 of a share of Globus Class A common stock for each share of NuVasive common stock owned at closing. Based on the exchange ratio, the implied share price for NuVasive totals $57.72. That amounts to an equity value of $3.1 billion.
“Our combination with NuVasive is a defining moment in our company’s history,” Globus Medical Executive Chair David Paul said. “I’m incredibly proud of the strong legacy we’ve built at Globus Medical, and I look forward to delivering on the many opportunities for our surgeon customers and their patients as a combined company.”
In connection with the closing, Globus Medical approved the expansion of its board of directors from eight directors to 11 directors and named the following three NuVasive board members to the Globus Medical board effective immediately: John DeFord, Leslie Norwalk, Daniel Wolterman.
NuVasive common stock ceased trading on the Nasdaq at the close of trading on August 31.